This is the largest Frequent Flyer scheme in the world in its home market.

It means we know our customers, we can keep them close, and we can retain their loyalty as we grow and change.

The current share price is frankly disappointing.

Clearly we are in a volatile economic environment.

No doubt it also reflects the concerns surrounding industrial disputes.

It does not, I believe, reflect the full value in our business today, and our high potential for tomorrow.

As you know, one area of our business seriously underperformed last year.

Qantas International absorbs 38% of our Group's invested capital but lost $216 million.

When 100 people go to an Australian international airport, right now - only 18 of them choose a Qantas flight.

Without change, the outlook for Qantas International this year would be far worse.

That's why the profit we announce today is good, but it must be better.

To put it into the broader context, last year we invested $2.4 billion in capital expenditure, and with our fleet and other commitments we will need to invest more than $5 billion in the next two years.

We can't carry these Qantas International losses.

We need to fix this weak part of our business.

With careful capital management we have fully secured funding for next year.

We have a strong cash balance, and with our investment grade credit rating we can keep downward pressure on the cost of borrowing.

But the fact remains. Today's good result is no argument against change: it is further proof that we must.

We refuse to follow those famous airline names that drifted into failure, and became nothing more than nostalgic memories.

Of course some people don't like change.

They talk about the Qantas of the good old days when it was a government-owned company, operating in a regulated market.

Those days are gone.

What will never go is our commitment to aviation safety, flying excellence, and a proud Australian spirit.

Some people no doubt think it would make sense to let Qantas International fade away and simply concentrate on the high performing parts of our portfolio. Well, I reject that.

The best way for us to honour the Qantas of the past is to make sure it has a future.

I believe the best days for Qantas still lie ahead.

Last week, I announced the first steps in a five year plan to turn around Qantas International in the short term, and to ensure the Qantas flying businesses - domestic and international combined - will exceed the cost of capital on a sustainable basis.

More detail on these measures will unfold over the coming months.

They will make Qantas more competitive, with more profitable routes, a more efficient fleet, and a cost base that is closer to that of our global peers.

Asia is vital to Australia's future, and to Qantas.

We are investing in an Asian-based airline specifically for the premium business travel market.

This will offer Australians more frequent connections to and within Asia on a brand new fleet.

This new airline will not cost a single Australian job.

Not one.

In fact, it will create new business and bring revenue and profits back to our country.

And we see a high potential future for Jetstar, with a new business in Japan and the latest fleet, so that Jetstar can continue to grow profitably in, and with, the most dynamic aviation region in the world.

The retirement of four B747 aircraft and other network changes will result in job cuts, which are painful.

But we are confident that many of the affected employees will volunteer to take generous severance packages.

Qantas has always been a leading employer and will remain so.

Most of our employees are with us.

They have embraced new technologies like faster smarter check-in, new fleet, and new ways of doing things.

They have stepped up magnificently during the various weather and disaster crises we've faced over the past year. I thank them all very much.

We do face significant challenges with a couple of unions.

But I can tell you that we will get through this period, and we will be unrelenting inthe pursuit of our reform agenda.

The airline industry is always challenging - we all know that.

But the Qantas Group has a deep strength in its portfolio, a strong balance sheet, immense flexibility in our investment profile, and a five year plan to turn around Qantas International.

We intend to make Qantas stronger so that we can keep being a great Australian business.

We will marshal our superior aviation skills, focus our assets and energies, and take on the competition on the national, regional and global stage.